Small Business

The Ins and Outs of Homesourcing


Allowing employees to work from home can save time and money. But it's crucial to track productivity and ensure private info stays private

I own an online corporate concierge service with 10 employees. We hope to grow to 15 or 20 employees this year. Right now, all the employees work in the same office, but I'm considering moving into a smaller, centrally located office and "homesourcing" our call-center staff, so they would work from their homes. What are some of the ins and outs—and caveats—of homesourcing?

–K.L., Toronto, Ont.

Downsizing your office and having some or all of your employees work from home can cut substantial dollars off your fixed expenses such as rent and utilities. It can also be a powerful recruiting tool, attracting employees who will overlook some of the drawbacks of working for a small company if they can skip the commute and work from a spare bedroom.

However, it's not the right solution for every company, and it can be a particularly difficult adjustment for creative companies where employees thrive on a high degree of daily interaction. Your employees must be willing to work from home—which can be a big plus for some people while others find it isolating and dull. Your workers must be disciplined and self-motivated, and you must be able to ensure that your firm's productivity and customer-service levels don't drop without on-site supervision of your staff (see BusinessWeek.com, 12/11/06, "Smashing the Clock").

Virtual Headquarters

Security is another important caveat: Will your employees be able to find secure space in their homes for your equipment and business information? Some companies worry when employees work in remote locations because of the private nature of the information they're exchanging. Be aware that if there are concerns along those lines in your company, you will need to implement measures to ensure the security of company and customer proprietary information (see BusinessWeek.com, Summer, 2005, "The Virtual Office Gets Real").

While you would likely continue to rent space in a commercial building for yourself and a few key employees, some small businesses today are opting for true "virtual offices." In such arrangements, the owner and all of the employees work from their homes and the owner rents a virtual-office location, paying for what's often a prestigious address and the services of a receptionist who routes telephone calls, mail, and faxes to the appropriate home offices without clients realizing their calls are being forwarded. When face-to-face client meetings are scheduled, professional conference rooms can be booked at many of these locations.

Today's technology is ideally suited to finding alternatives to traditional office space, says Dan Manheim, president of Global Business Centers. "Phone PBX systems and Virtual Private Networks, for example, allow employees located anywhere to work seamlessly," he notes (see BusinessWeek.com, 9/11/06, "Taking Off").

Benchmarks Are Key

"Cutting out commuting time to a physical office can often save hours, allowing [you and your employees] more time to devote to work. With a very low investment, companies can set up even short-term virtual offices that allow them to expand into new regions, test new markets, and aid short-term sales campaigns."

The key element to a successful homesourcing transition is planning, says Harprit Singh, chief executive of Intellicomm and Innoport, a communications company that serves virtual-office arrangements. "Establish specific goals you want to achieve with homesourcing, whether they're lower costs, higher productivity, higher employee satisfaction, or tapping into a bigger pool of available talent," Singh says. Setting these goals will allow you to objectively measure whether homesourcing is a good idea for you now, and give you a yardstick to evaluate your progress later.

Establish key benchmarks on your current worker productivity, Singh suggests. "Look at the calls handled in the current environment and compare that metric to calls handled once the transition happens," he says. "This will provide a sound foundation in evaluating whether the productivity of any individual worker has substantially changed, for better or for worse, once homesourcing goes into effect."

Maintenance Matters

You will also need to establish basic work-from-home guidelines about accountability and responsibility, since your employees will no longer be monitored in their day-to-day activities. And you will need to figure out how your remote workers will stay connected with the main office. "All of their communication needs—e-mail, fax, telephone, printers, scanners, computers, Smartphone, Internet access—should be understood beforehand. Presumably, you want the clients to feel the least amount of impact on quality of service during and after the transition," Singh says.

Another technology issue will be maintenance: How will you service all the equipment spread out over home offices, and what will you do if the equipment fails? Make sure you have room for remote employees to work out of the main office if their power goes off at home, or their Internet access doesn't work.

Singh recommends transitioning a few workers at a time into homesourcing, rather than doing it all in one move. Gradually moving people into their homes allows you to meet any unanticipated challenges without having a significant impact on your customer service and existing business output. "After you transition a few workers to homesourcing, see how their productivity is vis-à-vis their productivity in the office, and make a judgment call about whether homesourcing is working for your business," he suggests. Then you can decide whether to continue forward with the complete transition or jettison the idea for now. Good luck!

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

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